measuring disaster risk - imf · measuring disaster risk prevalent vulnerability index source: idb...

For a natural disaster event that can occur once every 100 years

Measuring Disaster RiskP

reva

lent

Vul

nera

bilit

y In

dex

Source: IDB

Source: IDB

40

50

60

30

20

10

0

Barbados

Panama

Nic

aragua

Dom

inic

an Republ ic

Peru

Guatem

ala

Jam

aica

Colom

biaM

exico

Chi le

Honduras

El Salv

ador

Bel ize

Ecuador

Costa R

ica

Bol ivia

Tr inid

ad and T

obago

Argent in

a

52 5247

495146 43 43 3940

343537383233

22

31

Est

imat

ed C

ost i

n 20

09 U

S$

mill

ion

Source: EM-DAT, Bureau of Labor Statistics and IDB Staff calculations

1940-1949

1960-1969

1980-1989

2000-2009

1900-1909

40000

35000

30000

25000

20000

15000

10000

5000

45000

50000

729

5,690

13,038

19,747

33,96434,327

43,015

Economic losses caused by natural disasters in Latin America and the Caribbean 1900-2009 (US$ million)

Dis

aste

r R

isk

Man

agem

ent I

ndex

Barbados

Panama

Nic

aragua

Dom

inic

an Republ ic

Peru

Guatem

ala

Jam

aica

Colom

bia

Mexic

o

Chi le

El Salv

ador

Ecuador

Costa R

ica

Bol ivia

Tr inid

ad and T

obago

Argent in

a

45 454143 41

3837

3334

26272729

242323

20

25

30

35

15

10

5

0

40

45

50

Disaster Deficit Index (2008)

Loca

l Dis

aste

r In

dex 70

80

60

50

40

30

20

10

0

El Salv

ador

Peru

Colom

bia

Mexic

o

Panama

Ecuador

Costa R

ica

Bolivia

Argentin

a

71

58

4843

37 3227

2

63

Inde

x ab

ove

1 sh

ows

econ

omic

cos

ts T

hat

exce

edst

ate

finan

cial

cap

acity

Source: IDB

Source: IDB

8

7

6

5

4

3

2

1

0

Barbados

Nicara

guaDom

inic

an Republic

Peru

Guatem

ala

Jam

aica

Colom

bia

Mexic

o

Chile

Honduras

El Salv

ador

Panama

Ecuador

Costa R

ica

Bolivia

Trin

idad a

nd Tobago

Argentin

a

7

3.142.8 2.42 2.28 1.94

1.53

0.73 0.670.32 0.29 0.13 0.1 0.07 0.03

3.15

0.77

http://www.iadb.org

Over the past century, population growth, unplanned urbanization, overexploitation of natural resources and the effects of climate change have dramatically increased the economic costs of natural disasters for Latin America and the Caribbean, underscoring the need for countries to better manage these risks.

The Disaster Deficit Index (DDI) shows potential economic losses countries can face and their governments’ financial capacity to address such costs. It measures the state’s capacity to pay in order to recover from the economic losses if a catastrophic event – the type that can occur once every 50, 100 or 500 years – were to happen in 2008. A DDI greater than 1.0 indicates economic losses would exceed the state’s financial capacities (the greater the DDI, the greater the financial gap).

The Local Disaster Index (LDI) evaluates the social and environmental risks stemming from recurrent small-scale disasters, looking at death tolls, numbers of affected people and damages to housing and crops. It measures a country’s propensity to suffer these types of disasters and their cumulative impact on development. An index below 20 implies a high concentration of small disasters in a few local areas. An indicator between 20 and 50 indicates a normal propensity and a number above 50 indicates that a majority of the areas of a country’s territory suffer small disasters.

The Prevalent Vulnerability Index (PVI) gauges the fragility and exposure of human and economic activity in disaster-prone areas and the social and human capacity to absorb the impacts of disasters. The three composite indicators that make up this index consider factors such as demographic growth, population density, poverty and unemployment levels, soil degradation caused by human action, gender balance, social expenditures and insurance of infrastructure and housing. An index of 20 or less indicates low levels of vulnerability while an index between 20 and 40 indicates a medium level. An indicator between 40 and 80 shows high vulnerability.

The Risk Management Index (RMI) measures a country’s risk management performance. It combines several measures to evaluate the capacity to identify and reduce risks, respond and recover from catastrophes as well as to provide financial protection and risk transfer. An index below 50 is considered unsatisfactory; a number between 50 and 75 is considered safisfactory and an index above 75 is considered outstanding.

Note: Disasters considered are earthquakes, �oods and storms. All U.S. dollars �gures were in�ation-adjusted using the U.S. Consumer Price Index For All Urban Consumers, as reported by the Bureau of Labor Statistics. Latin American and Caribbean countries included in the calcula-tions: Argentina, Bahamas, Barbados, Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Suriname, Trinidad and Tobago, Uruguay and Venezuela.

Local Disaster Index (2001-2005)

Prevalent Vulnerability Index (2007)

Disaster Risk Management Index (2008)